There’s a reason financial services have evolved. People have realized they can spend their time in better ways and manage their money more effectively than by “playing” the markets. They have turned to wealth managers in record numbers—particularly in Canada, where people are more inclined to seek professional wealth management than in many other countries.
A generation ago, people usually sought a broker—often a number of brokers—just for guidance on how to play the markets. Calls of “Buy! or “Sell!” were prompted by experience and knowledge in some cases—and mere tips and hunches in others. Today, as corporate pensions disappear and the limitations of government plans are widely recognized, people want trusted partners who know that their ultimate goal is greater than stock selection or determining interest rate directions—more meaningful than price/earning ratios or yield curves: they want partners who know that what really matters is peace of mind.
Peace of mind comes from knowing there is a strategic plan in place to provide for one’s long-term needs—for a comfortable retirement, education for one’s children or grandchildren, travel, the fulfillment of a dream, or making a major career change. And planning is what wealth management is all about.
A profile of households with and without Investment Advisors, prepared in April of this year for The Investment Funds Institute of Canada (IFIC) by Ipsos Canada, revealed that:
- Households with an advisor are considerably more affluent than those without an advisor.
- Households with an advisor are considerably more confident about their ability to meet their retirement goals than those without an advisor.
- Households without an advisor tend to be more concerned about their debt load.
- Households with an advisor are not very interested in managing their investments on their own compared to those without an advisor.
If you don’t have an advisor, and you have no plan to manage your investments, the future could one day hit you as suddenly as a fall on cold, wet pavement.
The Canadian website GetSmarterAboutMoney.ca, an unbiased, not-for-profit website operated by the Investment Education Fund, offers the following advice about why you should work with an advisor: Without qualified advice, you could run a greater risk of losing money. You may be unaware of the many sophisticated market, sector and corporate factors at play in successful investing. You could miss critical warning signs and fall for a scam—ending up involved in a deal that looks good but is actually a fraud. Or, you may end up doing nothing—fear of making a big mistake could cause you to park your money in a low-interest bank account, missing the chance to earn more. Even worse, you could simply fritter away your savings until the money is all gone.
The site also offers a few wise tips on how to choose the right advisor for you. Ask yourself: What do I want to do with my money? How much do I know about investing? How much money am I planning to invest? How much am I willing to pay for advice? Do I need help with other financial matters, not just investing? Once you answer these questions, make sure the advisor you choose is someone you can trust; who listens to you and answers your questions clearly; who you can talk to when you need advice; who is trained and registered by a securities regulator to give you the help you need; and who is available to help when you need guidance.
From a common sense standpoint, it’s also a good idea to seek an advisor who prepares and adheres to an Investment Policy Statement (IPS), liaises with your other professional advisors (such as your lawyer and accountant) and constantly reviews and refines your portfolio to proactively minimize downside risk.
Harp Sandhu is an Investment Advisor with Macquarie Private Wealth Inc. who specializes in wealth planning strategies for retirees, professionals approaching retirement and business owners through a client-focused approach.
Harp Sandhu, BA Econ., CSA
Investment Advisor
Phone 250-978-5362
Toll free 1-877-978-9300
www.macquarieprivatewealth.ca/sandhu
This material is provided for general information and is not to be construed as an offer or solicitation for the sale or purchase of securities mentioned herein. Every effort has been made to ensure the contents of this letter have been compiled or derived from sources believed to be reliable and contains information and opinions which are accurate and complete. However, neither the author nor Macquarie Private Wealth Inc. (MPW)) makes any representation or warranty, expressed or implied, in respect thereof, or takes any responsibility for any errors or omissions which may be contained herein or accepts any liability whatsoever for any loss arising from any use or reliance on this report or its contents. Links to other web sites or references to products, services or publications other than those of Macquarie Private Wealth Inc. (MPW) on this Web Site do not imply the endorsement or approval of such web sites, products, services or publications by MPW. MPW makes no representations or warranties with respect to, and is not responsible or liable for, these web sites products, services or publications.
No entity within the Macquarie Group of Companies is registered as a bank or an authorized foreign bank in Canada under the Bank Act, S.C. 1991, c. 46 and no entity within the Macquarie Group of Companies is regulated in Canada as a financial institution, bank holding company or an insurance holding company. Macquarie Bank Limited ABN 46 008 583 542 (MBL) is a company incorporated in Australia and authorized under the Banking Act 1959 (Australia) to conduct banking business in Australia. MBL is not authorized to conduct business in Canada. No entity within the Macquarie Group of Companies other than MBL is an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Australia), and their obligations do not represent deposits or other liabilities of MBL. MBL does not guarantee or otherwise provide assurance in respect of the obligations of any other Macquarie Group company. Macquarie Private Wealth Inc. is a member of the Canadian Investor Protection Fund and IIROC.
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